India Inflation Seen Accelerating Past RBI Target Rest of 2021
India’s retail and wholesale inflation will probably accelerate during the second half of this year, according to economists surveyed by Bloomberg.
The wholesale price index is expected to continue to grow in double-digits, at 10.71% from a year during the July-September quarter, up from the previous forecast of 10.12%, before slowing to 9.13% in the last quarter of the calendar year, according to the survey. Economists also upgraded their outlooks for consumer inflation to 5.7% and 5.2%, respectively, for the final two quarters of 2021.
For the full survey report: India Economic Forecasts in July 2021
Forecasts for gross domestic product were raised to a 9.2% expansion in the fiscal year ending March 2022, from the previous 9%, while the gross value added outlook edged down slightly to 9%.
Headline inflation will stay above the RBI’s 4% target, said Bernard Aw, head of Asia-Pacific economics at Coface in Singapore. “Should CPI remain persistent at current elevated rates, and stay around or above the top end of the 2%-6% target band, we don’t rule out a hike as early as January-March 2022.”
Indian monetary policy makers have maintained that the country’s current inflation is due to supply-side problems and won’t persist, while they focus resources on an economic rebound.
©2021 Bloomberg L.P.